Japan’s response to Chinese economic coercion
Lessons from Tokyo’s resilience against Beijing’s economic pressure
The Investigator | No. 03/2026
In Tokyo, Sanae Takaichi, Prime Minister of Japan, has begun her term by explicitly casting the People’s Republic of China’s (PRC) behaviour as a campaign of ‘coercion’, using her first post‑election policy speech to warn that Japan faces its ‘most severe and complex security environment since World War Two’, as well as promising a sweeping overhaul of defence and economic security policy. Her ruling coalition’s landslide victory, securing well over two thirds of the Lower House, gives her unusual latitude to accelerate defence spending, relax export controls on military equipment and harden critical supply chains against external economic pressure.
Beijing has responded in kind at the rhetorical level. At the Munich Security Conference, Wang Yi, Minister of Foreign Affairs of the PRC, portrayed Japan’s Taiwan policy as a dangerous departure from past commitments, castigating Takaichi’s framing of a Taiwan contingency as a ‘survival-threatening situation’ and accusing Tokyo of challenging the PRC’s sovereignty and the post‑war settlement. He further suggested that efforts to ‘turn back the clock of history’ would lead Japan down a path of self‑destruction, underscoring how tightly Beijing now links Tokyo’s stance on Taiwan to its own narrative of national rejuvenation.
Against this backdrop, the big picture of Japanese-Chinese relations looks set to remain frosty at best. Takaichi’s agenda to revise Japan’s core security documents, double defence spending and entrench closer alignment with like‑minded partners, combined with Beijing’s sharper warnings over Taiwan and its revived toolkit of economic coercion, point towards a prolonged period of strategic distrust, in which both sides treat economic ties less as a stabilising ballast and more as instruments of leverage.
Sectors under pressure
The current coercive campaign concentrates on three clusters of sectors.
First, marine and aquatic products have again become a primary target. The PRC imposed a blanket ban on imports of Japanese fishery products in 2023 following the release of treated water from the Fukushima Daiichi nuclear plant – a measure later echoed by Hong Kong and Macau. Although partial relaxation followed, Beijing reimposed a suspension of Japanese seafood imports in November 2025 amid diplomatic tensions sparked when Sanae Takaichi, Prime Minister of Japan, remarked that a Taiwan contingency could trigger Japan’s right of collective self-defence.
Second, Beijing has tightened controls on dual-use exports and critical minerals, especially rare earth elements. On 6th January 2026, the PRC’s Ministry of Commerce announced a ban on exports to Japan of all dual-use items for military end-users or end-uses that could enhance Japan’s military capabilities, explicitly justified in terms of national security and non-proliferation. State-affiliated outlets simultaneously indicated that Beijing was considering stricter licensing for certain medium and heavy rare earths already under control since April 2025, with delays and de facto curbs affecting rare earths, magnets and other critical inputs.
Third, the PRC has deployed pressure in tourism, education and cultural industries. Since Takaichi’s speech in November, Chinese authorities have advised citizens to reconsider travel and study in Japan, reduced flights and quietly constrained Japanese cultural and media products in the Chinese market. These measures fall short of formal sanctions, but nonetheless target Japan’s services sector and people-to-people ties.
Motives and sector choice
Beijing has formally justified these measures with reference to Fukushima-related food safety and national security export-control obligations. In reality, the timing, scope and signalling make it clear that the proximate trigger has been Japan’s perceived ‘interference’ in the ‘Taiwan question’ and its broader security realignment.
The seafood bans are framed domestically as necessary to protect Chinese consumers from ‘nuclear-contaminated’ products, despite the International Atomic Energy Agency’s (IAEA) assessment that Japan’s discharge plan complies with international safety standards. Chinese state and social media have continued to amplify alarmist narratives about Fukushima water, often repeating or adapting disinformation that has already been debunked.
The choice of fisheries, rare earths and tourism reflects a logic of targeted salience and reversible pressure. Beijing can utilise these disruptions to achieve high impact to signal displeasure, but can stop the economic pain easily should its demands be met.
Continuity and change in Chinese coercion
There is clear continuity in the use of informal or semi-formal trade tools by the PRC – including blanket import bans, opaque customs procedures, unofficial travel advisories and ‘safety’-based regulatory measures – to punish political decisions in other states. This pattern has also characterised Beijing’s coercive campaigns against South Korea over its Terminal High Altitude Area Defence (THAAD) capabilities, Australia over foreign policy disputes and Lithuania over Taiwan representation, confirming that economic statecraft has become a normalised instrument of Chinese foreign policy.
What is new is the explicit linkage to Taiwan and to Japan’s evolving defence posture. Chinese official statements and state-linked media have directly cited Takaichi’s comments about a potential military response in a Taiwan contingency as the trigger for dual-use and rare earth measures, arguing that Japan has violated the PRC’s core security interests. Rare earth controls in particular are now framed as part of a broader dual-use export control regime rather than a one-off leverage play.
This ‘second generation’ of coercion is also operating in a context in which Japan is no longer the heavily exposed actor it was in 2010. Japan’s reliance on Chinese rare earth imports has fallen from around 90% in 2010 to roughly 65% by the mid-2020s, as Tokyo has diversified suppliers, invested in recycling, and supported domestic and third-country production.
Japan’s response
Japan’s response to the latest measures builds directly on the institutional architecture described in its Economic Security Promotion Act and related strategies.
Politically and diplomatically, Tokyo has characterised the seafood bans and dual-use controls as forms of economic coercion, raising them at the Group of Seven (G7) and other fora, and signalling readiness to challenge at the World Trade Organisation (WTO). The 2025 Diplomatic Bluebook devotes significant space to economic security, and explicitly links coercive practices to the need for international coordination and resilience.
On the economic security front, Japan’s Ministry of Economy, Trade and Industry (METI) and Cabinet Office have accelerated efforts to incorporate undersea cables, satellites and other critical infrastructure into the economic security framework, while tightening monitoring of rare earths, magnesium and other vulnerable inputs. Tokyo has expanded strategic stockpiles, supported alternative supply projects with partners such as Australia, and backed Research and Development (R&D) into substitution and recycling to reduce exposure to new Chinese controls.
Domestically, the Government of Japan has provided financial support and market diversification assistance to fisheries and coastal communities hit by the seafood bans, seeking to ease distributional impacts and blunt Beijing’s ability to generate political backlash in affected constituencies. At the same time, the unfolding crisis has reinforced calls in semi‑official Japan-Taiwan economic security dialogues for closer collaboration, including joint research on the risks of Chinese economic coercion and supply‑chain disruption, and has strengthened arguments for embedding economic security more firmly in broader alliance planning with the United States (US) and free and open European nations.
Lessons for other countries
Several lessons from this episode are directly relevant to the United Kingdom (UK) and other free and open allies and partners of Japan.
First, the PRC’s coercion is increasingly multi-dimensional and explicitly tied to Taiwan-related and security issues. Governments should expect measures to be justified in legal or technical terms, while in practice responding to political triggers. Preparing for coercion therefore requires not only trade law expertise, but also careful mapping of political red lines and likely pressure points.
Second, resilience must be built in peacetime. Japan’s experience shows that diversification of critical inputs, investment in domestic capacity and stockpiling can significantly reduce the shock value of coercive measures, even if they do not eliminate vulnerability. For Britain, this underscores the importance of early action on critical minerals and strategic infrastructure, including telecommunications and undersea cables, rather than waiting for a crisis.
Third, institutionalised economic security pays dividends. Dedicated economic security units, clear legal mandates and established channels for engagement with the private sector have allowed Tokyo to respond in a more coordinated and strategic manner than in 2010. The UK would benefit from similarly integrated structures that connect trade, security, industrial strategy and intelligence in a single economic security framework.
Finally, Japan’s case highlights the value and limits of multilateralism. Efforts to frame Chinese actions as economic coercion in G7 communiqués and economic security statements have helped to socialise the concept, raise reputational costs for Beijing and embed ‘de-risking and diversifying’ as shared goals. However, concrete solidarity in moments of acute pressure has often lagged behind the rhetoric: coordination has focused on generic commitments to resilience and critical minerals cooperation rather than visible, Japan-specific countermeasures.
As well as this, bilateral bargains with Beijing, including recent US-PRC understandings on rare earths, risk diluting the deterrent value of a collective line. Until systemic diversification reduces the PRC’s market power meaningfully, and G7 members are prepared to absorb short‑term economic costs on each other’s behalf, economic coercion will remain an attractive tool for Beijing.
Athena Tong is a Visiting Researcher in the Economic Security Intelligence Lab (ESIL) at the Research Centre for Advanced Science and Technology (RCAST) at the University of Tokyo. She is also a Research Associate and Programme Lead at the China Strategic Risks Institute (CSRI) and a Non-Resident Vasey Fellow at the Pacific Forum.
To stay up to date with Observing China, please subscribe or pledge your support!
What do you think about this Analysis? Why not leave a comment below?
 | A guest post by
|